IDB Secures Additional EUR 100 Million for Dairy Expansion

IDB and Rabobank, as lead bank and arranger of the RID, and the other participating banks, have developed a facility which accommodates the specific funding requirements of IDB’s members.

Jan 27 2012 --- The Irish Dairy Board (IDB) has completed the re-financing of its existing €250m syndicated banking facility replacing it with a new three year syndicated bank loan facility of €350m at competitive pricing, to meet domestic expansion and international growth requirements.

The participant Banks are; Allied Irish Banks, Bank of America Merrill Lynch, Barclays, HSBC, Ulster Bank and Rabobank, with IBI Corporate Finance advising on the deal.

This new facility comprises two parts:

- a €160m syndicated loan facility to fund IDB’s existing requirements and to invest in developing its international growth strategy; and
- a €190m committed syndicated Reverse Invoice Discounting facility (RID)* to fund the working capital requirements of IDB’s members. This will provide IDB’s members with an additional €50m and greater security of funding, replacing the previous uncommitted working capital funding lines provided heretofore by IDB to its members.

The RID is a recent development in supplier financing by international banks to fund the working capital requirements of their international corporate clients.

IDB and Rabobank, as lead bank and arranger of the RID, and the other participating banks, have developed a facility which accommodates the specific funding requirements of IDB’s members.

The RID will be used by IDB as the platform to develop a scalable funding solution to finance the increase in working capital requirements that will arise as a result of the anticipated increased milk expansion post the abolition of milk quotas in 2015.

Commenting, Cathal Fitzgerald, Finance Director, IDB said: "The successful completion of this deal in the current financial environment and on competitive terms is a strong vote of confidence by the participating banks in the IDB and the Irish dairy industry. The new facilities strengthen our capital structure and enhance the operational flexibility of the IDB by extending the maturity profile of our debt to December 2014. For our members, this unique facility is a significant step forward on the path to developing a robust funding solution to support the future development and growth of the Irish dairy sector."